The Italian Parliament has approved the Stability
Law for 2016, which has revised the relevant provisions of the
Italian Tax Code on black lists on corporate taxation and the
Controlled Foreign Companies (CFC) rules. As a result, the Italian
black list on the 'deductibility of costs' has been
abolished as from 1 January 2016, as has the black list on
Controlled Foreign Companies (CFCs). Therefore, from this time,
Jersey will no longer be listed.

The only remaining general criterion for the application of the
CFC rules (without list) will be the low level of corporate
taxation of the controlled foreign company. It is considered as a
low level of taxation, for both general and special regimes, a rate
of 50% lower than the Italian CIT rate (which is 27.5% for 2016 and
will be 24% for 2017 onwards). This will mean that the CFC
provisions will continue to apply as they will to all jurisdictions
who meet the low level of taxation criteria, but there will be no
listing of these jurisdictions. The Italian authorities are
informing the EU Commission of these changes and this should mean
that Italy is not included among the Member States that are said to
have a black list.

In addition, from early 2016, the Italian "white list"
for the purposes of tax treatment of interest from government bonds
and listed companies will be updated, taking into account the
agreements on exchange of information, compliant with the
international standards, entered into force in the meanwhile.
Since Jersey has a legal instrument in force allowing for the
exchange of information with Italy, we have been advised that it
will be included in the white list. These changes also apply to
Guernsey.

'This is welcome news for our island, with Italy, a major EU
country removing the blacklisting. It is testament to the
determined and collaborative work between Jersey's government,
industry and regulator on our tax transparency agenda that has
helped result in this positive outcome for our future business
opportunities.' Geoff Cook, CEO, Jersey Finance.

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